Startup Aquasight taps into data behind water

Aquasight looking to fracking, water equipment manufacturing as key areas of growth

Kurt Nagl/Crain's Detroit Business

(From back left clockwise) Carol King, business development manager; David Inman, on-boarding engineer; Ravindra Rapaka, product lead; and Zaki Shalhout, product lead, are part of a team of six full-time employees, plus part-time consultants, at Aquasight that works out of an office building in Troy at 1650 W. Big Beaver Road.

More than 300 billion gallons of water are drawn from the United States daily — about 10 percent of it pulled from the Great Lakes — and overseen by more than 16,000 entities.

Water management is a massive, fragmented industry, but what's been left largely untapped until recently is the data behind the world's most important resource — how it flows, how it's treated, its quality.

Inefficiencies and poor management have led to wasted water, cost utilities and customers millions of dollars and, in the most extreme cases, such as Flint, caused tainted tap water. To solve these issues, more water managers are turning to automated tracking systems as digitization upends the ways of old. There's an international race to harness the data behind water, and a Troy-based startup called Aquasight counts itself among the contenders.

"There's too much live data," said Mahesh Lunani, a 49-year-old career businessman who founded Aquasight in 2015. "I thought, how about we create a platform that they can plug into — AI to automatically solve issues."

Mahesh Lunani

Lunani runs a team of six full-time engineers and scientists, plus a few part-time consultants, who work on the bottom floor of a nondescript office on Big Beaver Road, building an alliterative portfolio of products. Ace, Atlas, Apollo and Aura are the current focus. They each serve a different purpose, but the company is constantly updating software and considering ways to integrate them.

Aquasight's programs take data — meter readings, quality tests, hydraulic models — from clients across different sectors, such as municipalities, treatment plants or even fracking companies. The data is then manipulated by its software to map the flow of water in a community, track quality, gauge treatment levels and provide predictions and early warnings for troubling data trends.

As long as there is a live stream of data from the client to Aquasight, the client can track these metrics in real-time with considerable accuracy, Lunani said. A user-friendly computer interface, and "Sami" — the Siri of Aquasight — indicates where there could be a water main break, for example, or if water needs more disinfectant.

"If you know how to use an iPad, you know how to use the system," he said.

Lunani, who has a master's degree in engineering from Wayne State University and completed a general manager program at Harvard Business School, isn't the first with this idea. Data management has been overlapping with the water service business since the rise of smart meters in the past decade.

The market for water-treatment equipment is valued at $118 billion globally, according to California-based market analyst Hexa Research Inc.

The U.S. market size is nearly $24 billion and growing. Data management is beginning to take up a larger chunk, with firms of all sizes flooding the market.

New York-based water tech company Xylem Inc. is one of the most dominant domestic companies in the space, with about $4.7 billion in annual revenue. The French firm Veolia Water, a $14 billion a year company, is also gobbling up market share. But there are dozens of smaller ones — Wisconsin-based Aquarius Technologies LLC, Vancouver-based Aquatic Informatics Inc., Kansas-based Atonix Digital LLC, to name a few.

"There are a plethora of AI companies entering the sector nearly every day — this is a transformative thing going on in the sector," said Sue McCormick, CEO of the Great Lakes Water Authority. "The first big innovation was smart meters. That was the birth of using data and beginning to mine it."

The GLWA serves 127 communities in the southeast part of the state. With a treatment capacity of 1.72 billion gallons of water per day, it is the largest water and wastewater utility in Michigan and one of the largest in the nation. It is also one of Aquasight's most important sponsors.

The GLWA is contracted with Aquasight to use two of its platforms: Aura and Apollo. Aura cost the utility a one-time fee of $100,000 to set up. As part of the deal with the GLWA, communities under its umbrella can opt into the technology by paying a subscription fee, which is one penny per resident per year, Lunani said.

Dearborn Heights was among the first to sign on, and several others have come aboard since. In 2017, Dearborn Heights entered a three-year contract with the company, which cost a $10,000 on-boarding fee and $2,458 per month, according to the contract. Mayor Daniel Paletko said the program has eased pressure on the water department staff and provided peace of mind for the city and its residents regarding water quality.

"I thought, after Flint, we oughta be looking at more things to make sure the water quality is fine," Paletko said.

As for Apollo, the technology tracks the GLWA's chemical usage and mines data from the pumps, blowers and mixers at its treatment plants to maximize O&M efficiency. Aquasight was awarded a $160,000 grant from the U.S. Department of Energy in 2016 to deploy the technology with the GLWA in a pilot program that ends in 2020 with the possibility of extension.

McCormick said the technology helps water departments move from being "responsive to being proactive."

"What we're advocating is this type of artificial intelligence tool as a benefit for our member communities, to see what's going on in their system overall, which is otherwise very difficult to understand," McCormick said of the Aura program.

Aquasight's technology has resulted in $2.8 million of annualized savings for the GLWA, according to the utility. Despite the success, it faces stiff competition from other data management firms, especially those with more capabilities. Last year, the GLWA hired Pure Technologies, which was acquired by Xylem around the time of the deal, to detect structural weaknesses in a water transmission pipe in Oakland County. The 18-month contract is worth about $2.3 million.

"AI is making its way into the water sector, and I think it's going to help us with performance, consistency and quality," McCormick said.

History and future

Lunani, a resident of Rochester Hills, started selling water pumps with his father in India at the age of 14. Although his career would take him far away from the water sector for several decades, he said his wide-ranging experiences set him up to come full circle and create Aquasight. He worked as an engineer with Ford for five years before taking a management consulting job with Roland Berger. He also worked for IBM and IT firm Cognizant Technology Solutions for four years each.

"Water, AI, technology, business and a digital venture — I'm using all of it (for Aquasight)," Lunani said.

Aquasight's projected revenue this year is $1.2 million to $2 million, depending on what new business it can secure. Lunani said he has invested about $3 million into the technology — $1 million of which was a "small, convertible debt" raised from business partners. He said he owns more than 90 percent of the company.

Lunani said he is shooting to double the company's business each year for the next five years. The company was awarded last month a $140,000 grant from the Massachusetts Clean Energy Center to implement its technology at wastewater treatment facilities in the state, according to a news release. Xylem also received a similar grant.

Aquasight is courting municipalities around the country, but the company needs more than pilot programs to achieve the growth envisioned by its leader. Since launching, Lunani and his team have learned a lot about running a startup. For one, selling the technology is just as important as developing it. Also, it may be necessary to alter the original vision for the sake of sustainability.

"The utility market is very slow," Lunani said. "For us to grow, we have to expand into faster-moving markets."

Lunani is in talks with fracking companies and water equipment manufacturers — two areas that he believes can fuel the company's growth. He declined to offer names of companies.

"The fundamental ability to manage the fracking water cycle as it pertains to treatment and collection is an expertise we have in addition to the technology expertise we have," he said. "Equipment manufacturers are creating portable treatment plants, and they want to utilize our technology, so they can see the performance of the treatment process."

While larger companies have a more diverse set of services, Lunani said Aquasight's real-time AI processing and "complexity in and simplicity out for users" sets it apart. He is seeking a patent for the company's first platform, Atlas, which he expects to be granted this year and is considering applying for patents on other innovations, he said.

Lunani also said he is in discussions with a "$50 billion to $100 billion company" to invest in Aquasight but has no intention of selling as it has "tremendous potential on its own." He declined to say which company.

In the shorter term, there are plans to contract with a sales force on the West Coast in the coming months to help the company market its product and allow Lunani and his team to better focus on technology development. That could mean more of a focus on the fracking and equipment manufacturing industries, or a venture outside water altogether.

"Our core technology can be applied to anything with live data coming in," he said. "That's what we've learned and how we can grow faster."